This archive report was first published on 12 May 2020.
As Kenyans adhere to social distancing measures to curb the spread of Covid-19, insurance firms have been urged to digitize their operations to reduce foot traffic to their outlets.
According to a recent survey conducted by the Institute of Insurance in Kenya, Insurance Information Bureau, and Esri Eastern Africa, digitizing operations will put insurance companies in a better position to overcome their biggest sector challenge: low penetration.
The survey, which was conducted in 2019, found that insurance penetration in Kenya had shrunk from 3.44 percent of the country's GDP to 2.43 percent due to a lack of engagement with customers and erosion of trust by insurance companies.
"To grow and remain relevant, insurance companies should be quick to transform via adoption of new technologies, benchmark with the global best while learning from local success stories in the financial and mobile communications sectors," said the Kenya Insurance Industry Survey 2019.
The survey also found that the current variety of insurance products does not fully cover Kenyan needs, with 57 percent of those surveyed saying that people earning below Sh50,000 are excluded from insurance products.
Insurance companies have been advised to adopt new business models and overhaul their products to accommodate emerging needs, especially for the youthful population, pensioners, and SMEs.
According to the 2020 Kenya Economic Survey, total assets of life insurance business increased by 15.2 percent to Sh451.9 billion in 2019, while total liabilities grew by 13.9 percent to Sh399.7 billion in the same period.
